Can't Install IBM Tivoli Storage Manager Server On Windows 2003 X64 Storage Server, How Can I Fix The Pkg?

I am a Windows developer for the IBM Tivoli Storage Manager Server (TSMS) product.
Our product installation is built with InstallShield and uses the Windows Installer.

On a new installation of Windows 2003 x64 Storage Server R2, at a customer's site, the TSMS product fails to install.
The install of the OS has version 3.01.400.3959 of the Windows Installer and I see no newer version that installs.

Part of our product is 32 bit (console) and another part is x64 (server).
When installing I can see that the install's default is being redirected/reset to C:Program Files (x86)TivoliTSM after it is explicitly set by a custom action to ..Program Files.. . I further observe that our custom actions to write 64 bit registry entries are being refused.

REGSAM samMask = KEY_ALL_ACCESS;
if ( regIsWow64Process () ) samMask = samMask | KEY_WOW64_64KEY;
lStatus = RegCreateKeyEx( hLocalConnectKeyRoot,
szSubkey,
0L,
NULL,
REG_OPTION_NON_VOLATILE,
samMask,
NULL,
hKey,
&dw ) ;
The above fails to create the key.

We have tried four versions of our TSMS spanning many changes but the install acts the same.
This does not happen on any other Windows OS we test on but we do not test on Windows 2003 Storage Server R2 being that it is an OEM product. We did test on Windows server 2003 R2 x64 and do not see this problem.

Do you have any suggestions on how to tackle this problem?
I have full installation traces but can only see that the registry work is being refused. I can't see why.